A misquote and a quote, both worth thinking about

Imagine the hypocrisy of an Administration that requires everyone to prove that they have bought health care insurance but opposes laws requiring everyone to prove they are citizens in order to vote. Then imagine the additional irony of the fact that undocumented aliens who cannot prove their citizenship may receive health care benefits paid for by those who are forced to buy health care insurance because they are citizens. These observations are sometimes attributed to Ben Stein, but this attribution is incorrect. The observations are, nonetheless, worth thinking about. I have added the relevant documentary links.

In just the last two tax years alone, my wife and I have paid in excess of $6000 in additional 3.8% Net Investment Income Tax to support Obamacare. This is not our payment for health insurance for ourselves or our children, which we are happy to pay and is separate, but an additional tax that we pay to support the health insurance of others. And yet, if we complain about being forced to pay this tax, we are thought of as troglodytes or neanderthals for being unwilling to contribute our "fair share" of the upkeep of the brave new progressive world. This all reminds me of the other observation, this one correctly attributed to Margaret Thatcher: "The trouble with Socialism is that eventually you run out of other people's money to spend."

Minimum wage lunacy from California's Democratic overseers

The increase in the minimum wage to $15 an hour in California is not only an outrageous tax imposed by our Democratic overseers on all the citizens of California (including the most vulnerable, for example, retired seniors living on fixed incomes), but also makes no economic sense. Increasing the minimum wage by such a large amount will merely serve to create an enormous incentive to replace unskilled workers in the workplace with robots and automation. Since highly skilled and highly compensated knowledge workers create these robots and automation, increasing the minimum wage will simply boost demand for those workers while driving down demand for low skill minimum wage workers, who now will become too expensive to employ relative to their skill level. This will inevitably result in higher unemployment for those low skill workers and a lower average wage, thereby actually increasing wage inequality.

If the Democrats had intentionally set out to hasten the spread of the kind of technological unemployment identified by Erik Brynjolfsson, they could not have chosen a better mechanism for doing so than by raising the minimum wage so dramatically. California Democrats claim to be acting on behalf of the little guy, when, in fact, they are driving the little guy right out of work.

RIP Nino

I was deeply saddened to hear of the death on Saturday of Supreme Court Justice Antonin Scalia. As should be evident from my post on the recent Obergefell decision, I had great admiration for Justice Scalia's tightly-reasoned arguments based on originalist principles. Insofar as his originalism tended to conserve the original meaning and value of the Constitution, he was perhaps the greatest conservative mind of our time and his passing should be mourned by us all.

As for what will happen next, Mr Obama has every right to send a nominee up to the Senate to replace Justice Scalia. The Senate likewise has every right to decline to confirm that nominee. In particular, even if Mr Obama sends up a nominee with impeccable credentials, the nominee may be rejected on the grounds that the Senate does not find his/her judicial philosophy to be suitable for the duties of a Justice (or because of insufficient clarity about his/her judicial philosophy). We have been taught by our Democratic colleagues that rejecting a judicial nominee on such grounds is ok. For, it was they who in 1987 refused to confirm Robert Bork on the grounds that his judicial philosophy was unacceptable and in spite of the fact that Mr Bork was a jurist of unimpeachable qualifications.

Obama's gun control fantasy

Obama wants to take everyone's guns away. But, the episode in San Bernadino demonstrates that such a policy would be futile. As WSJ reports:

[A]t the scene, investigators found three connected pipe bombs set to be detonated by a contraption linked to a remote-controlled car.

In other words, without guns, crazy people will just manufacture homemade explosive devices.

Once again, we need to remind ourselves that it is not the weapons themselves that kill innocent people, but rather, the sick souls who wield them.

The French are now going to discover ...

The French are now going to discover, as the Israelis did before them, that Obama is not their ally. In fact, they will come to realize that George W Bush, whom they have despised as a cowboy, would be a far more willing partner in the struggle against Islamic extremism than Mr Obama will be, who would rather negotiate a pathway to nuclear weapons with Iran than defeat ISIS. Expect a speech from Francois Hollande soon complaining that, whereas French solidarity and support was forthcoming in the post-9/11 days, Obama is dragging his feet after Paris.

Victor Hanson for debate moderator

After the poor showing by the CNBC moderators in the Republican debate last night, here is one vote for Victor Hanson as a moderator in upcoming debates. Victor is just the kind of intelligent conservative who would do an excellent job of posing serious and probing questions to both Republican and Democratic candidates.

An idiot's argument in favor of raising the minimum wage: Part 2

Back in 2013 in a post entitled An idiot's argument in favor of raising the minimum wage I wrote:

Stephen Gandel concludes that "the average Wal-Mart employee's take home pay should be $33,315," whereas it now stands at a mere $22,000. According to this argument, then, Wal-Mart should increase the pay of each American Wal-Mart employee by $11,315 per year. Now, as Mr Gandel himself notes, Wal-Mart has 1.4 million American employees. To give an $11,315 a year raise to 1.4 million employees would cost Wal-Mart an additional $15.841 billion per year. According to Yahoo!, Wal-Mart has 3.26 billion shares outstanding. So, the additional wage expense would amount to about $4.86 per share. Wal-Mart's current earnings per share -- again, according to Yahoo! -- are $5.20. So, we are being asked to believe that Wal-Mart could essentially wipe out its entire earnings per share and this would have no impact whatsoever on its share price. This is what passes for economic argument in our society today.

Well, the jury is in. Wal-mart has indeed been increasing minimum wages. These increases have contributed to an earnings shortfall. As a result, the stock has plunged from a high of around $90 a share to today's current quote of around $60 a share.

USA Today reports:

[Brian Yarborough, a consumer analyst at Edward Jones,] questions whether Walmart will be able to meet even the reduced profit target as the company spends billions of dollars on building its Internet technology platform and raising salaries for sales associates. ... [And equity analyst Ken Perkins of Morningstar writes] "The sell-off and market price of Walmart's shares imply that Walmart's recent investments in e-commerce and wages will be unsuccessful in driving profits long-term."

In his article, Mr Gandel wrote:

So how much should Wal-Mart pay its employees? To tackle that tricky question, I crunched a bunch of numbers and concluded this: Wal-Mart’s workers should get a 50% raise. ... The conventional wisdom, of course, is that if Wal-Mart were to hand out raises, its stock would tank. That may not be true. ... Investors are basically giving Wal-Mart’s executives a green light to raise wages. So why not?

I would like to hear what Stephen Gandel has to say about the impact of minimum wage increases on Wal-Mart's stock price now.